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Tidewater Reports First Quarter Results For Fiscal 2018

NEW ORLEANS, Aug. 8, 2017 /PRNewswire/ -- Tidewater Inc. (NYSE:TDW) announced today a first quarter net loss for the period ended June 30, 2017, of $524.4 million, or $11.13 per common share, on revenues of $115.1 million. For the same quarter last year, net loss was $89.1 million, or $1.89 per common share, on revenues of $167.9 million. The immediately preceding quarter ended March 31, 2017, had a net loss of $94.9 million, or $2.01 per common share, on revenues of $160.7 million.

Included in the net loss for the quarter ended June 30, 2017 were the following:

$313.2 million ($313.2 million after-tax, or $6.65 per share) of reorganization items related to the Company's Chapter 11 proceedings.

$163.4 million ($163.4 million after-tax, or $3.47 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the June 2017 quarter.

$11.9 million ($11.9 million after-tax, or $0.25 per share) of debt renegotiation expenses were incurred in the quarter, which includes $6.7 million classified as general and administrative expenses and $5.2 million classified as reorganization items.

$1.2 million ($1.2 million after-tax, or $0.02 per share) of foreign exchange losses resulting primarily from the strengthening of the Norwegian kroner on liabilities relative to the U.S. dollar.

Included in the net loss for the prior fiscal year's quarter ended June 30, 2016 were the following:

$36.9 million ($36.1 million after-tax, or $0.77 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the June 2016 quarter.

$2.7 million ($2.6 million after-tax, or $0.06 per share) of foreign exchange losses, most notably the devaluation of Nigerian nairas relative to the U.S. dollar.

$1.1 million ($1.1 million after-tax, or $0.02 per share) of foreign exchange losses which is included in Equity in net losses of unconsolidated companies and related to our Angola joint venture, Sonatide.

Included in the net loss for the preceding quarter ended March 31, 2017 were the following:

$64.9 million ($64.9 million after-tax, or $1.38 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the March 2017 quarter.

$16.8 million ($16.8 million after-tax, or $0.36 per share) of general and administrative expenses related to debt renegotiations.

$39.1 million ($31.3 million after-tax and after consideration of noncontrolling interests, or $0.67 per share) of revenue related to the early termination of a long-term vessel charter contract.

As previously disclosed, on May 17, 2017, Tidewater and certain of its subsidiaries filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware, seeking approval of a prepackaged plan of restructuring.

On July 31, 2017, the company and its affiliated chapter 11 debtors emerged from bankruptcy after successfully completing its reorganization pursuant to the Second Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Tidewater and its Affiliated Debtors, that was confirmed on July 17, 2017 by the United States Bankruptcy Court for the District of Delaware.

Additional details about the restructuring are available on the company's website, www.tdw.com, and at http://dm.epiq11.com/tidewater, or via the company's restructuring information line 844-843-0204 (toll free) or 504-597-5543 (international calls). Additional details about the restructuring will also be available in the company's Form 10-Q, which is expected to be filed with the SEC shortly after the issuance of this press release.

The company will not be hosting an earnings conference call to discuss first quarter fiscal 2018 financial results. However, we expect to resume holding quarterly earnings conference calls to report our second quarter fiscal 2018 financial results.

Tidewater is the leading provider of Offshore Service Vessels (OSVs) to the global energy industry.

Note: all per-share amounts are stated on a diluted basis.

Financial information is displayed on the next page.

TIDEWATER INC.

(Debtor-in-Possession)

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Unaudited)

(In thousands, except share and per share data)

Three Months Ended

June 30,

2017

2016

Revenues:

Vessel revenues

$

112,257

162,430

Other operating revenues

2,849

5,495

115,106

167,925

Costs and expenses:

Vessel operating costs

83,773

108,874

Costs of other operating revenues

1,585

3,903

General and administrative

33,059

37,047

Vessel operating leases

5,542

8,441

Depreciation and amortization

36,287

44,552

Gain on asset dispositions, net

(3,189)

(5,643)

Asset impairments

163,423

36,886

320,480

234,060

Operating loss

(205,374)

(66,135)

Other income (expenses):

Foreign exchange loss

(1,157)

(2,733)

Equity in net earnings (losses) of unconsolidated companies

4,517

(1)

Interest income and other, net

1,680

1,176

Reorganization items

(313,176)

—

Interest and other debt costs, net

(10,605)

(16,954)

(318,741)

(18,512)

Loss before income taxes

(524,115)

(84,647)

Income tax expense

295

3,996

Net loss

$

(524,410)

(88,643)

Less: Net income attributable to noncontrolling interests

24

454

Net loss attributable to Tidewater Inc.

$

(524,434)

(89,097)

Basic loss per common share

$

(11.13)

(1.89)

Diluted loss per common share

$

(11.13)

(1.89)

Weighted average common shares outstanding

47,121,304

47,067,715

Dilutive effect of stock options and restricted stock

—

—

Adjusted weighted average common shares

47,121,304

47,067,715

TIDEWATER INC.

(Debtor-in-Possession)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and par value data)

June 30,

March 31,

ASSETS

2017

2017

Current assets:

Cash and cash equivalents

$

683,778

706,404

Trade and other receivables, net

116,612

123,262

Due from affiliate

252,810

262,652

Marine operating supplies

31,097

30,560

Other current assets

34,619

18,409

Total current assets

1,118,916

1,141,287

Investments in, at equity, and advances to unconsolidated companies

49,216

45,115

Net properties and equipment

2,659,314

2,864,762

Other assets

92,134

139,535

Total assets

$

3,919,580

4,190,699

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

35,087

31,599

Accrued expenses

63,155

78,121

Due to affiliate

121,037

132,857

Accrued property and liability losses

2,758

3,583

Current portion of long-term debt

10,106

2,034,124

Other current liabilities

28,029

48,429

Total current liabilities

260,172

2,328,713

Long-term debt

80,863

—

Deferred income taxes

—

46,013

Accrued property and liability losses

2,776

10,209

Other liabilities and deferred credits

60,382

154,705

Liabilities subject to compromise

2,389,557

—

Commitments and Contingencies

Equity:

Common stock of $0.10 par value, 125,000,000 shares authorized, issued 47,121,304 shares at June 30, 2017 and 47,121,304 shares at March 31, 2017

4,712

4,712

Additional paid-in capital

165,516

165,221

Retained earnings

950,895

1,475,329

Accumulated other comprehensive loss

(10,258)

(10,344)

Total stockholders' equity

1,110,865

1,634,918

Noncontrolling interests

14,965

16,141

Total equity

1,125,830

1,651,059

Total liabilities and equity

$

3,919,580

4,190,699

TIDEWATER INC.

(Debtor-in-Possession)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

Three Months Ended

June 30,

2017

2016

Net loss

$

(524,410)

(88,643)

Other comprehensive income:

Unrealized gains on available for sale securities, net of tax of $0 and $0

Equity in earnings (losses) of unconsolidated companies, less dividends

(4,101)

108

Compensation expense - stock-based

326

1,536

Changes in assets and liabilities, net:

Trade and other receivables

6,650

26,414

Changes in due to/from affiliate, net

(1,978)

5,947

Marine operating supplies

(514)

1,288

Other current assets

(16,210)

(4,147)

Accounts payable

3,488

4,613

Accrued expenses

8,603

(19,993)

Accrued property and liability losses

(825)

289

Other current liabilities

2,644

(6,814)

Other liabilities and deferred credits

1,251

(3,212)

Other, net

2,724

(4,084)

Net cash used in operating activities

(23,363)

(10,903)

Cash flows from investing activities:

Proceeds from sales of assets

608

1,234

Additions to properties and equipment

(1,627)

(7,578)

Payments related to novated vessel construction contract

5,272

—

Refunds from cancelled vessel construction contracts

—

11,515

Net cash provided by investing activities

4,253

5,171

Cash flows from financing activities:

Principal payment on long-term debt

(2,316)

(2,324)

Other

(1,200)

(1,722)

Net cash used in financing activities

(3,516)

(4,046)

Net change in cash and cash equivalents

(22,626)

(9,778)

Cash and cash equivalents at beginning of period

706,404

678,438

Cash and cash equivalents at end of period

$

683,778

668,660

Supplemental disclosure of cash flow information:

Cash paid during the period for:

Interest, net of amounts capitalized

$

433

26,733

Income taxes

$

3,611

11,006

Supplemental disclosure of non-cash investing activities:

Additions to properties and equipment

$

—

2,537

TIDEWATER INC.

(Debtor-in-Possession)

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

Accumulated

Additional

other

Non

Common

paid-in

Retained

comprehensive

controlling

stock

capital

earnings

loss

interest

Total

Balance at March 31, 2017

$

4,712

165,221

1,475,329

(10,344)

16,141

1,651,059

Total comprehensive loss

—

—

(524,434)

86

24

(524,324)

Stock option expense

—

293

—

—

—

293

Amortization of restricted stock units

—

2

—

—

—

2

Cash paid to noncontrolling interests

—

—

—

—

(1,200)

(1,200)

Balance at June 30, 2017

$

4,712

165,516

950,895

(10,258)

14,965

1,125,830

Balance at March 31, 2016

$

4,707

166,604

2,135,075

(6,866)

6,034

2,305,554

Total comprehensive loss

—

—

(89,097)

232

454

(88,411)

Stock option activity

—

277

—

—

—

277

Cancellation of restricted stock awards

—

—

192

—

—

192

Amortization/cancellation of restricted stock units

—

1,383

—

—

—

1,383

Balance at June 30, 2016

$

4,707

168,264

2,046,170

(6,634)

6,488

2,218,995

The company's vessel revenues and vessel operating costs and the related percentage of total vessel revenues for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017, were as follows:

Quarter

Quarter Ended

Ended

June 30,

March 31,

(In thousands)

2017

%

2016

%

2017

%

Vessel revenues:

Americas (A)

$

31,887

28%

60,608

37%

80,533

51%

Asia/Pacific

4,627

4%

7,921

5%

5,951

4%

Middle East

23,139

21%

24,202

15%

20,727

13%

Africa/Europe

52,604

47%

69,699

43%

49,694

32%

Total vessel revenues

$

112,257

100%

162,430

100%

156,905

100%

Vessel operating costs:

Crew costs

$

42,210

38%

55,888

34%

41,829

27%

Repair and maintenance

13,844

12%

16,529

10%

17,074

11%

Insurance and loss reserves

3,124

3%

6,996

4%

(1,767)

(1%)

Fuel, lube and supplies

9,428

8%

10,772

7%

9,279

6%

Other

15,167

14%

18,689

12%

14,430

9%

Total vessel operating costs

83,773

75%

108,874

67%

80,845

52%

Vessel operating margin (B)

$

28,484

25%

53,556

33%

76,060

48%

Note (A): Included in Americas vessel revenue for the quarter ended March 31, 2017 is $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract.

Note (B): The following table reconciles vessel operating margin as presented above to vessel operating profit (loss) for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017:

Quarter

Quarter Ended

Ended

June 30,

March 31,

(In thousands)

2017

2016

2017

Vessel operating margin (C)

$

28,484

53,556

76,060

General and administrative expenses - vessel operations

(18,002)

(25,916)

(19,445)

Vessel operating leases

(5,542)

(8,441)

(8,443)

Depreciation and amortization - vessel operations

(34,892)

(42,441)

(36,173)

Vessel operating profit (loss)

$

(29,952)

(23,242)

11,999

Note (C): Included in vessel operating margin for the quarter ended March 31, 2017 is $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract.

The company's other operating profit (loss) for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017, consists of the following:

Quarter

Quarter Ended

Ended

June 30,

March 31,

(In thousands)

2017

2016

2017

Other operating revenues

$

2,849

5,495

3,844

Costs of other marine revenues

(1,585)

(3,903)

(2,689)

General and administrative expenses - other operating activities

(355)

(638)

(525)

Depreciation and amortization - other operating activities

(854)

(1,381)

(855)

Other operating profit (loss)

$

55

(427)

(225)

The company's operating loss and other components of loss before income taxes and the related percentage of total revenues for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017, were as follows:

Quarter Ended

Quarter Ended

June 30,

March 31,

(In thousands)

2017

%

2016

%

2017

%

Vessel operating profit (loss):

Americas (D)

$

(15,699)

(14%)

(4,326)

(3%)

30,618

19%

Asia/Pacific

(4,782)

(4%)

(5,574)

(3%)

(3,358)

(2%)

Middle East

3,466

3%

(33)

(<1%)

(2,806)

(2%)

Africa/Europe

(12,937)

(11%)

(13,309)

(8%)

(12,455)

(8%)

(29,952)

(26%)

(23,242)

(14%)

11,999

7%

Other operating profit (loss)

55

<1%

(427)

(<1%)

(225)

(<1%)

(29,897)

(26%)

(23,669)

(14%)

11,774

7%

Corporate general and administrative expenses (E)

(14,702)

(13%)

(10,493)

(6%)

(21,757)

(14%)

Corporate depreciation

(541)

(<1%)

(730)

(1%)

(564)

(<1%)

Corporate expenses

(15,243)

(13%)

(11,223)

(7%)

(22,321)

(14%)

Gain on asset dispositions, net

3,189

3%

5,643

3%

6,064

3%

Asset impairments

(163,423)

(142%)

(36,886)

(21%)

(64,857)

(40%)

Operating loss

$

(205,374)

(178%)

(66,135)

(39%)

(69,340)

(43%)

Foreign exchange gain (loss)

(1,157)

(1%)

(2,733)

(2%)

664

<1%

Equity in net earnings (losses) of unconsolidated companies

4,517

4%

(1)

(<1%)

2,841

2%

Interest income and other, net

1,680

1%

1,176

1%

1,588

1%

Reorganization items (F)

(313,176)

(272%)

—

—

—

—

Interest and other debt costs, net

(10,605)

(9%)

(16,954)

(10%)

(21,008)

(13%)

Loss before income taxes

$

(524,115)

(455%)

(84,647)

(50%)

(85,255)

(53%)

Note (D): Americas segment vessel operating profit for the quarter ended March 31, 2017 includes $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract.

Note (E): Corporate general and administrative expenses for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017 include $6.7 million, $3.9 million and $16.8 million, respectively, of costs associated with debt renegotiations. Costs associated with debt renegotiations were classified as general and administrative expenses through our chapter 11 Petition Date of May 17, 2017. Subsequent to the Petition Date, $5.2 million of costs associated with debt renegotiations were classified as reorganization items.

Note (F): Reorganization items of $313.2 million which are comprised of (i) the lessors' claims reserve of $323.6 million plus leasehold improvements to vessels underlying sale leaseback transactions of $1.7 million, partially offset by the recognition of remaining deferred gains of $105.9 million and accrued liabilities associated with the recognition of lease expense on a straight-line basis of $11.3 million, (ii) $94.8 million of make-whole claims on the Senior Notes and $5.1 of debt issue costs and (iii) professional fees associated with the restructuring incurred subsequent to the Petition Date of $5.2 million.

The company's revenues, days-based vessel utilization percentages and average day rates by vessel class and in total for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017, were as follows:

Quarter

Quarter Ended

Ended

June 30,

March 31,

2017

2016

2017

REVENUE BY VESSEL CLASS (In thousands):

Americas fleet:

Deepwater (G)

$

17,313

40,387

62,831

Towing-supply

11,274

16,879

14,738

Other

3,300

3,342

2,964

Total

$

31,887

60,608

80,533

Asia/Pacific fleet:

Deepwater

$

1,154

2,590

1,138

Towing-supply

3,473

5,331

4,813

Other

—

—

—

Total

$

4,627

7,921

5,951

Middle East fleet:

Deepwater

$

9,547

6,038

8,295

Towing-supply

13,592

18,164

12,432

Other

—

—

—

Total

$

23,139

24,202

20,727

Africa/Europe fleet:

Deepwater

$

22,158

33,289

23,032

Towing-supply

27,019

27,917

22,794

Other

3,427

8,493

3,868

Total

$

52,604

69,699

49,694

Worldwide fleet:

Deepwater

$

50,172

82,304

95,296

Towing-supply

55,358

68,291

54,777

Other

6,727

11,835

6,832

Total

$

112,257

162,430

156,905

Note (G): Included in Americas fleet deepwater revenue for the quarter ended March 31, 2017 is $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract.

Quarter

Quarter Ended

Ended

June 30,

March 31,

2017

2016

2017

UTILIZATION:

Americas fleet:

Deepwater

23.4%

41.8

29.7

Towing-supply

36.4

41.6

41.8

Other

50.0

48.0

45.7

Total

30.3%

42.5

35.2

Asia/Pacific fleet:

Deepwater

10.4%

10.2

9.1

Towing-supply

27.1

53.3

34.4

Other

—

—

—

Total

21.3%

33.5

24.7

Middle East fleet:

Deepwater

89.0%

58.8

79.7

Towing-supply

86.8

67.7

71.4

Other

—

—

—

Total

87.5%

65.9

74.2

Africa/Europe fleet:

Deepwater

51.7%

54.7

53.6

Towing-supply

51.7

46.4

42.1

Other

31.3

52.1

31.0

Total

45.6%

51.0

42.5

Worldwide fleet:

Deepwater

41.1%

44.4

42.6

Towing-supply

50.9

51.6

46.9

Other

33.9

50.2

32.8

Total

44.0%

48.6

42.6

Quarter

Quarter Ended

Ended

June 30,

March 31,

2017

2016

2017

AVERAGE VESSEL DAY RATES:

Americas fleet:

Deepwater (H)

$

19,869

25,480

57,311

Towing-supply

15,959

16,917

17,816

Other

9,071

8,507

9,015

Total

$

16,423

20,368

35,756

Asia/Pacific fleet:

Deepwater

$

12,686

22,039

12,641

Towing-supply

6,489

6,595

7,640

Other

—

—

—

Total

$

7,389

8,555

8,265

Middle East fleet:

Deepwater

$

9,564

15,468

9,643

Towing-supply

7,826

10,167

8,214

Other

—

—

—

Total

$

8,460

11,117

8,732

Africa/Europe fleet:

Deepwater

$

11,482

15,840

11,763

Towing-supply

13,040

15,085

13,940

Other

3,265

4,713

3,652

Total

$

10,413

12,112

10,682

Worldwide fleet:

Deepwater

$

12,897

19,622

23,797

Towing-supply

10,961

12,546

11,893

Other

4,759

5,392

4,922

Total

$

10,842

13,727

15,693

Note (H): Included in Americas fleet deepwater average day rates for the quarter ended March 31, 2017 is $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract. Excluding the early cancellation revenue, total Americas fleet deepwater average day rates would have been $21,602 for the quarter ended March 31, 2017.

The company's average number of vessels by class and geographic distribution for the quarters ended June 30, 2017 and 2016 and for the quarter ended March 31, 2017:

Quarter

Quarter Ended

Ended

June 30,

March 31,

2017

2016

2017

Americas fleet:

Deepwater

41

42

41

Towing-supply

21

26

22

Other

8

9

8

Total

70

77

71

Less stacked vessels

35

30

34

Active vessels

35

47

37

Asia/Pacific fleet:

Deepwater

10

13

11

Towing-supply

22

17

20

Other

1

1

1

Total

33

31

32

Less stacked vessels

24

17

24

Active vessels

9

14

8

Middle East fleet:

Deepwater

12

7

12

Towing-supply

22

29

24

Other

—

—

—

Total

34

36

36

Less stacked vessels

1

6

—

Active vessels

33

30

36

Africa/Europe fleet:

Deepwater

41

42

41

Towing-supply

44

44

43

Other

37

38

38

Total

122

124

122

Less stacked vessel

49

34

54

Active vessels

73

90

68

Active owned or chartered vessels

150

181

149

Stacked vessels

109

87

112

Total owned or chartered vessels

259

268

261

Joint-venture and other

8

9

8

Total

267

277

269

Note (I): Included in total owned or chartered vessels at June 30, 2017 and 2016 and at March 31, 2017, were 115, 89 and 111 vessels, respectively, that were stacked by the company. These vessels were considered to be in service and are included in the calculation of our utilization statistics.

The table below summarizes the various commitments to acquire and construct new vessels, by vessel type, as of June 30, 2017:

(In thousands, except vessel count)

Number of

Vessels

Total Cost

Invested

Through

6/30/17

Remaining

Balance

6/30/17

Vessels under construction (J):

Deepwater PSV

1

$

53,639

47,452

6,187

Total vessel commitments

1

$

53,639

47,452

6,187

Note (J): Two remaining option vessels, a vessel rejected at the time of delivery and a fast supply boat are not included in the table above. The company has $6.2 million in unfunded capital commitments associated with one vessel under construction at June 30, 2017.